The Institute of Chartered Accountants of India (ICAI) notes with great pride that the Government has accepted its recommendations with regard to the roadmap for implementation of Indian Accounting Standards (Ind AS) for companies other than banking companies, insurance companies and NBFCs. ICAI had recommended this roadmap to the Ministry of Corporate Affairs (MCA) in August 2014, subsequent to the Budget statement of the Hon’ble Finance Minister to implement the Indian Accounting Standards converged with International Financial Reporting Standards on voluntary basis from 1st April, 2015 and on mandatory basis from 1st April, 2016.
Ever since the notification of Indian Accounting Standards converged with IFRS by MCA in February 2011, the ICAI has been in the process of updating, revising and issuing new Ind AS converged with IFRS issued by the IASB after 2011 so that when the country moves towards implementation of the Ind AS, the same should be at par with the IFRS currently in force internationally as well. As a consequence to this preparedness, ICAI was able to revise all the Ind AS and issued the new Ind AS converged with IFRS and submitted them on timely basis to the National Advisory Committee on Accounting Standards (NACAS) constituted by the MCA. The NACAS has also completed the exercise and recommended all the Ind AS to the MCA last month. It is expected that the Ministry will notify the new set of Ind AS shortly.
ICAI recognises that notification of the Ind AS is only the first step though an important one. To be effective, the Ind AS have to be implemented in the same way as they are implemented internationally. CA.K.Raghu, President, ICAI said “ Since the Ind AS require generation of new type of financial information which is to be reported in the Ind AS-compliant financial statements, the systems of the companies need to be modified appropriately to generate such information. Further, not only the professionals involved in the preparation of financial statements as per Ind AS need to have the necessary skill-sets to implement the Ind AS as these require judgements and estimates to be made which were hitherto not required, but also the auditors need to upgrade their skills in this regard. ICAI through its IFRS certification course has already trained large number of professionals.”
Going forward, the ICAI plans to gear up its capacity building endeavours in a focused manner. Raghu added “The ICAI is planning to hold chain seminars throughout the country with a view to develop the necessary skills and knowledge for smooth and effective implementation of the Ind AS. To begin with, ICAI is holding a workshop on January 15, 2015 of companies that have experience of preparing IFRS financial statements, to discuss the first-time adoption issues.” The ICAI also plans to bring out educational materials for all Ind AS (it may be noted that the education materials for 7 Ind AS have already released). The ICAI also plans to launch the Ind AS in the electronic form so that the professionals and others concerned may use the contents of the Ind AS in a more effective manner.
As per the roadmap, after the initial phase of Ind AS becoming mandatory from 1st April, 2016 whereby about 550 listed companies are expected to implement the Ind AS (the number would be higher if unlisted companies having net worth of more than Rs. 500 crore are also covered). This number is likely to increase next year as all the listed companies and unlisted companies having networth of more than Rs. 250 crores will get covered in the next year.
Raghu added “Further, banks, NBFCs and Insurance Companies are expected to move to Ind AS 2-3 years thereafter. Accordingly, over the next few years more and more entities will apply Ind AS on mandatory basis while a few do so on voluntary basis with a view to bring their financial statements at the international level. The ICAI has accordingly geared itself on long-term basis to meet the challenges in the implementation of IFRS.” (Source- ICAI)